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Comcast offers more than Fox for Sky bid

U.S. cable giant and NBCUniversal owner Comcast has offered £22 billion in its bid for Sky, more than Rupert Murdoch’s 21st Century Fox

U.S. cable giant and NBCUniversal owner Comcast has offered more than Rupert Murdoch’s 21st Century Fox in its bid for Sky. It has proposed $31 billion (£22 billion) takeover bid for the European pay TV giant. NBCUniversal’s parent company offers a 16 percent premium, with Comcast CEO Brian Roberts not seeing any material regulatory issues like the ones that have delayed the Fox deal review. The parent company unveiled the possible all-cash offer of £12.50 per share ($17.48) to Sky’s shareholders. That marks a 16 percent premium to Fox’s existing bid of £10.75 per share. The British takeover code requires companies to be ready with finances as well as fulfill certain other criteria before making a formal offer.

The company said that a combination will bring attractive financial benefits to Comcast shareholders and is expected to be accretive to Comcast’s free cash flow per share in year one, adding that the deal will enhance its entertainment, distribution and technology capabilities and expand Comcast’s international footprint to more effectively compete in the rapidly changing and intensely competitive entertainment and communications landscape.

Terming Sky an outstanding company, Comcast chairman and CEO Brian Roberts said that Sky has 23 million customers and leading positions in the U.K., Italy, and Germany. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming. It has great people and a very strong and capable management team.

Roberts added that Comcast intends to use Sky as a platform for growth in Europe. Comcast already has a strong presence in London through its NBCUniversal international operations, and it intends to maintain Sky’s U.K. headquarters. Adding Sky to the Comcast family of businesses will increase its international revenues from 9 percent to 25 percent of company revenues.

Fox has owned 39 per cent stake in Sky for a long time and offered to buy the remaining 61 percent in December 2016. However, its bid was hampered by a regulatory review in Britain as regulators were concerned about the future of Sky News and the influence of the Murdoch family. In reaction to that, Fox has offered new concessions, including an extended commitment to U.K. news channel Sky News, to seal regulatory approval of the deal.

Responding to the development, Sky said that the independent committee of Sky has noted the announcement from Comcast regarding a possible all cash offer for Sky at £12.50 per share. The independent directors of Sky are mindful of their fiduciary duties and their obligations under the U.K. Takeover Code. Since no firm offer has been made at this point, it advised shareholders not to take no action. A further announcement will be made as and when appropriate.

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